OFFICE OF THE UNITED STATES ATTORNEY
WESTERN DISTRICT OF MISSOURI
Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106
AUGUST 6, 2010
FOR IMMEDIATE RELEASE
SPRINGFIELD MAN PLEADS GUILTY TO INVESTMENT FRAUD;
INVESTORS LOST UP TO $1 MILLION
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced today that a Springfield, Mo., man has pleaded guilty in federal court to his role in a real estate scheme in which investors lost up to $1 million.
John Michael Sheehan, 50, of Springfield, pleaded guilty before U.S. District Judge Richard E. Dorr on Tuesday, Aug. 3, 2010, to conspiracy to commit mail and wire fraud as well as a money laundering conspiracy.
Sheehan admitted that he participated in a conspiracy to commit wire fraud and mail fraud from June 1, 2005, through June 30, 2006. Sheehan used his businesses, John Michael Investment, LLC, (JMI) and 3MOM, Inc., to defraud investors who paid to purchase and rehabilitate residential properties. The government believes Sheehan is responsible for defrauding investors of $1,023,670.
Sheehan used a Web site to solicit investments to purchase and rehabilitate single family residential homes, which would then be sold and the proceeds split between the investors and JMI. The Web site promoted John Sheehan (using the name of “John Michael”) as “the King of Bling” and promised investors a 10 to 18 percent return within a year on a minimum investment of $15,000. Investors also attended investment seminars hosted by Sheehan.
Although investors were told that they would be the sole investor on each property, Sheehan admitted that he collected investments from multiple investors for the same properties. Sheehan also admitted that he diverted some of these investments and did not actually use the money to purchase or rehabilitate the properties.
For example, eight investors provided a total of $120,000 for the purchase and rehabilitation of a property at 2054 N. Park in Springfield. However, Sheehan admitted that he did not purchase the property. Sheehan returned $18,500 to one of the investors but did not return the $15,000 to the other seven investors.
In another instance, five investors provided a total of $83,375 for the purchase and rehabilitation of a property at 2006 N. Travis in Springfield. Sheehan purchased the property for $19,900 and it was later sold for $69,900, but Sheehan did not return any money to the five investors.
Under federal statutes, Sheehan is subject to a sentence of up to 30 years in federal prison without parole, plus a fine and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by the U.S. Postal Inspection Service, IRS-Criminal Investigation and the Missouri Secretary of State.
This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at